Should real estate use ERP?
Although there are many similarities with the business and service providers, the real estate business (real estate) still has relatively different management needs, so it needs specific ERP solutions.
More “weapons” competition
In Vietnam, the need to implement a real estate enterprise resource planning (ERP) system only begins to appear when the housing market enters a period of quality and quantity changes. About 10-15 years ago, the concept of real estate business in Vietnam was often associated with “land”. A former real estate investment company used to search for a land with potential profit, make investment plans, apply for a license, clear compensation, divide the land plot, and eventually sell the land. This model is relatively simple, mainly based on the ability of investors to apply for a fastest way.
However, after this period, managers have introduced regulations that require businesses (real estate) instead of selling the ground, selling finished products to the market. At this time, real estate project investors started to look for new ways to mobilize, such as investment capital from prospective customers, or calling for capital contribution, payment in stages. This can be seen as a diversion in the form of business.
In addition, there must be more and more new competitors in the real estate market. Therefore, businesses need to standardize management processes to achieve cost and service quality advantages. In this situation, the need to apply ERP management solutions – with appropriate optimization processes has begun to appear.
The real estate market in a locality will be narrowed over time, with a high level of competition. Therefore, these businesses may target new and untapped markets with potential. Even businesses can target neighboring countries.
As real estate enterprises’ operations become more complex, scale and challenges increase, the cost of a real estate project will increase. The operating model with one main investor and many subcontractors will increase the cost of project management. Therefore, real estate businesses must consider investing in management solutions, such as ERP, in order to optimize operating costs like traditional business or production enterprises.
Focus on financial management
Real estate companies that start implementing ERP should not go too deep into the project management tasks below, so they should stand at the level of management of an investor. In particular, much focus on financial management and add a part on payment to suppliers. This approach will help businesses ensure the forecast of money in and out and manage costs. After establishing a well-functioning platform and putting it into operation – business, it is possible to expand to more specialized and detailed operations – industry-specific business solutions ”.
Currently, businesses also tend to provide many services such as office leasing, luxury apartments and attached services. Meaning that real estate businesses are expanding their portfolio (portfolio) based on many segments. These segments often fluctuate heterogeneously and are relatively sensitive to the market. If businesses do not manage their portfolios well, do not indicate the segment with high profit potential, as well as ways to optimize costs, it is difficult to optimize profits.
Copy the ERP model
With the complexity of the project model, with the participation of foreign investors (Asia Pacific and Korea, Taiwan), the real estate industry in Vietnam began to be regional. According to local and foreign real estate project management companies, it is difficult to copy the real estate project model from the West to Vietnam, due to differences in market nature and conditions. land…
Meanwhile, in the Asia Pacific region, there have been many successful real estate projects of companies such as CapitaLand (headquartered in Singapore), Ayala Land of Philippines, or City Development of Singapore. We can fully apply the best practices of these projects to Vietnam. Typically, the Bitexco Financial Tower project has achieved a similarity in excess of 85% with the best practices in real estate management drawn from Southeast Asia.
Management plans of real estate businesses often follow the life of the project. Enterprises will set up an investment plan, calculate the problem of capital return, then proceed to the stage of application for investment licenses and project site investment. Next is to build real estate and sell products (sell or rent). In addition, it must also consider the accompanying services such as maintenance, maintenance, replacement, upgrade … Even, businesses also consider the final stage of liquidation of transfer or destruction of real estate. end of use life.